Why no one in Kenya should be left behind in the times of digital resolution

If Kenya wants to bring the top half of the country actively into the economy, the country may need to literally stop funding anything else for a whole year to afford it.

Read also: A Telecoms mast pumps life into a tiny village in Narok County

The country requires Sh2.1 trillion to finance the construction of an airport port, power plant, railway, and other facilities from the Lamu port, through to South Sudan and Ethiopia for the Lapsset project.

This will open up the North for business, bring it closer to the South and close the marginalization gap that has haunted counties like; Garissa, Turkana, Marsabit, Mandera, Samburu, Wajir, and Isiolo.

Simply put this cannot be done and the far-flung areas of the country may have to wait years to see this actualize while the South continues to ride on better infrastructure, leaving half of the country behind.

However, with Kenyans moving Sh3.98 trillion via mobile phones, almost half the country’s Gross Domestic Product, closing the economic gap may only require a tiny fraction of investment.

On average Sh10.92 billion mobile cash transactions per day through mobile platforms including M-Pesa and Airtel Money and T-Kash.

However just like on roads, railways, and electricity the remote areas in the North also lack the infrastructure to allow them to participate in the new wave of technological revolution driving prosperity in the country.

And while It may cost trillions to roll out Lapsset, it may only cost Sh18 million to put up one Base Station with the potential of looping in several people secluded from participating in the new economy.

By setting up the Universal Service Fund (USF), the Government through the Communication Authority of Kenya (CA) has noted the need to connect the underserved areas.

All three telecom operators – Safaricom, Airtel, and Telkom Kenya – contribute 0.5 percent of their annual turnover to the fund, which in turn is managed by the Universal Service Advisory Council (USAC).

The authority also contributes 25 percent of its surplus revenue to the fund.

But while the fund has grown to Sh7.17 billion kitty to be spent by this year, why has it not been aggressively used to bring the North into the loop?

To give credit, Safaricom has once again been on the forefront of advancing this agenda having spent Sh880 million of the kitty. Telkom Kenya has only spent half of Safaricom at Sh350 million to bring connection to the edges of the country.

According to the authority, Safaricom has built 30 of the 48 base stations assigned under the Universal Service Fund arrangement, while Telkom is in the process of completing one such station out of the 30 allocated by the regulator.

Somehow, Bharti Airtel did not bid to build any sites, raising questions about the company’s reluctance to tap into the fund for expansion.

Part of this may be explained by the company’s strategy to rely on the implementation of the Study Findings on: Competition in the Telecommunications Sector in Kenya.

The findings proposed that Safaricom Kenya Limited should be compelled to lease its facilities to willing competitors for a fee to be determined by the Communications Authority through regulatory price setting.

This approach has however been faulted by analyst including the think tank The Institute of Economic Affairs.

“The IEA-Kenya is concerned that the report recommended that the costs of infrastructure sharing should be fixed by the regulator. This preemptive approach assumes that the firms in the industry are unable to negotiate prices among themselves,” IEA said in a policy brief.

IEA said that the compulsion of Safaricom Kenya Limited or other market players to share their infrastructure with competitors is a disincentive for infrastructure investment because it sends the signal that the state may appropriate that infrastructure and allow it to be used by a competitor.

If CA wanted to apply such a policy proposal then it would have to explore the use of the Universal Service Fund to establish infrastructure in the seven counties because this responsibility is legally placed in its domain.

The ThinkTank said that such a policy would only be defensible where the infrastructure was wholly established by public investments and that is not true for this situation.

Oh hi there 👋
It’s nice to meet you.

Sign up to receive awesome content in your inbox, every month.

We don’t spam! Read our privacy policy for more info.